Novartis (NOVN) Q3 2025 earnings summary

Executive summary

• Q3 2025 net sales grew 7% in constant currency (cc) and 8% in USD to $13.9 billion, with core operating income up 7% (cc) and 6% (USD), driven by strong performances from priority brands and new launches.

• Net income rose 25% (cc) and 23% (USD) year-over-year; EPS up 29% in Q3 and 32% for nine months, benefiting from higher profits and a lower share count.

• Significant pipeline progress with FDA approvals (remibrutinib/Rhapsido in CSU), positive Phase III results (ianalumab, Pluvicto, Kisqali), and regulatory milestones for multiple products.

• Reaffirmed full-year 2025 guidance for high single-digit net sales growth and low-teens core operating income growth, with the Avidity acquisition expected to enhance long-term growth.

• Free cash flow for Q3 reached $6.2 billion (+4% USD), and $15.9 billion for nine months (+26% USD), supporting reinvestment, M&A, and shareholder returns.

Financial highlights

• Q3 net sales: $13.9B (+7% cc, +8% USD); nine months: $41.2B (+11% cc, +11% USD).

• Q3 core operating income: $5.5B (+7% cc); Q3 operating income: $4.5B (+27% cc, +24% USD); net income: $3.9B (+25% cc, +23% USD).

• Q3 core EPS: $2.25 (+10% cc, +9% USD); Q3 EPS: $2.04 (+29% USD, +31% cc); nine months core EPS: $6.94 (+21% cc, +19% USD).

• Free cash flow for nine months: $15.9B (+26% USD); Q3: $6.2B (+4% USD).

• Core operating income margin: 39.3% in Q3; nine months: 41.2%.

Outlook and guidance

• Full-year 2025 guidance reaffirmed: high single-digit net sales growth, low-teens core operating income growth.

• Q4 2025 growth expected to be impacted by prior-year one-time items and generic erosion; underlying growth trends remain strong.

• Currency impact for 2025 expected to be neutral to slightly positive for net sales, negative for core operating income.

• Avidity acquisition to dilute core margin by 1%-2% through 2028, with a return to 40% margin in 2029.

• Core net financial expenses projected at ~$1.1B; core tax rate expected at 16-16.5%.